Lante Reports 1Q Loss, Lower Revenue

Lante

Lante CEO Rudy Puryear told analysts during a Thursday morning conference call that a number of circumstances came together during the quarter to produce results that were below original expectations. He also outlined initiatives to sharpen the focus of the company.

"Our short-term results belie the decisive steps we are taking to differentiate Lante from other IT consultants over the long term," Puryear said. "Lante remains financially strong despite the tough market for consulting services in this economy."

For the quarter ended March 31, Lante reported a loss, before charges, of $4.7 million, or 13 cents per share, on sales of $7.6 million. That compares with a loss of $5.8 million, or 15 cents per share, on sales of $12 million for the same period last year.

When taking into account a $1 million restructuring charge, $1.6 million in amortization of deferred compensation and intangible assets from the recent acquisition of Luminant Worldwide Assets, offset by $2.2 million a of income tax benefit, the loss was $4.3 million, or 12 cents per share.

First Call predicted a loss of only a penny. Lante ended the quarter with $52 million in cash and investments.

In March, Lante said it would lay off about 80 employees amid lowered earnings estimates. That followed an organizational shake-up in January aimed at leveraging its acquisition of assets from Luminant.

Lante bet big on B2B but found itself in a sea of integrators struggling to deal with sharp declines in market demand and revenue amid increasingly uncertain economic conditions. In June 2001, Lante shifted its focus from B2B to business-partner integration services.

Puryear said Lante is now aggressively building capabilities, alliances and demonstration prototypes, as well as client work, using "the next generation of Internet technologies."

"These technologies allow people to interact in real-time with other people and computers," Puryear said. "We are confident our actions are positioning Lante for future growth and profitability."

Large systems integrators won't enter this new area for some time "because they can't generate the large-scale projects that suit their business model," Puryear said.

"Very importantly, these technologies are energizing our workforce," Puryear said. "Stay tuned. You will be hearing more."

As Lante entered the second quarter, the company reported a billable head count of 175. Total head count stands at 237.

In the short term, Lante CFO Bill Davis said the environment remains difficult, and the company, like others in the market, continues to experience uncertainty stemming from client delays, project scope changes and extensions of project start dates.

"In light of those factors, we believe revenue could be as much as 15 percent less sequentially in the second quarter," Davis said.

Davis projected a cash loss of less than $3.3 million for the second quarter. About one-third of that loss represents an anticipated investment by Lante in development and training efforts in realtime, interactive technologies, he said.

Lante was trading up a penny, at 96 cents per share, following Thursday's earnings call.